Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized for You

we will pick new questions that match your level based on your Timer History

Track Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

It appears that you are browsing the GMAT Club forum unregistered!

Signing up is free, quick, and confidential.
Join other 500,000 members and get the full benefits of GMAT Club

Registration gives you:

Tests

Take 11 tests and quizzes from GMAT Club and leading GMAT prep companies such as Manhattan GMAT,
Knewton, and others. All are free for GMAT Club members.

Applicant Stats

View detailed applicant stats such as GPA, GMAT score, work experience, location, application
status, and more

Books/Downloads

Download thousands of study notes,
question collections, GMAT Club’s
Grammar and Math books.
All are free!

Thank you for using the timer!
We noticed you are actually not timing your practice. Click the START button first next time you use the timer.
There are many benefits to timing your practice, including:

A basic savings account pays interest once per year on Decem [#permalink]

Show Tags

27 Aug 2013, 23:57

00:00

A

B

C

D

E

Difficulty:

35% (medium)

Question Stats:

76% (02:05) correct
24% (01:31) wrong based on 37 sessions

HideShow timer Statistics

A basic savings account pays interest once per year on December 31. If Alan deposits $300 into the account on January 1, 2004, and does not deposit or withdraw any money in the meantime, then to the nearest cent, how much was in the account when he withdrew the money on January 1, 2009?

(1) The savings account interest rate is 2% per year (2) If Alan had left the money in the account for 2 more years, he would have had, to the nearest cent, $13.12 more.

The answer is D. For statement (2), the book explains the equation as $300(1+i)6 - $300(1+i)4= 13.12. But, I think n should be 7 and 5 and be squared, not multiplied: $300(1+i)^7 - $300(1+i)^5= 13.12 Can anyone answer this??

by the way, do you guys see many errors in the Princeton Review?? Because I have found many....;;

Re: A basic savings account pays interest once per year on Decem [#permalink]

Show Tags

28 Aug 2013, 03:26

1

This post received KUDOS

sehosayho wrote:

A basic savings account pays interest once per year on December 31. If Alan deposits $300 into the account on January 1, 2004, and does not deposit or withdraw any money in the meantime, then to the nearest cent, how much was in the account when he withdrew the money on January 1, 2009?

(1) The savings account interest rate is 2% per year (2) If Alan had left the money in the account for 2 more years, he would have had, to the nearest cent, $13.12 more.

The answer is D. For statement (2), the book explains the equation as $300(1+i)6 - $300(1+i)4= 13.12. But, I think n should be 7 and 5 and be squared, not multiplied: $300(1+i)^7 - $300(1+i)^5= 13.12 Can anyone answer this??

by the way, do you guys see many errors in the Princeton Review?? Because I have found many....;;

seho,

2 different formulas for simple interest & compound interest. Your formula is for compound interest and not for simple interest.

Unless mentioned that amount is compounded, we assume its simple interest.

Formula for simple interest is I = PTR/100 where P is principal amount ($300 in this case) T = Time in years (4 yrs) , R is rate of interest.
_________________

Re: A basic savings account pays interest once per year on Decem [#permalink]

Show Tags

28 Aug 2013, 19:35

Thank you, but I still dont get it why the time in years is 4? Since Alan deposit it on Jan, 2004 and the interest paid every Dec 31, Alan gets interest on Dec ,31 2004, 2005, 2006, 2007, and 2008. right? So, the time in years should be 5 I think. If im wrong, what am i missing?

seho,

2 different formulas for simple interest & compound interest. Your formula is for compound interest and not for simple interest.

Unless mentioned that amount is compounded, we assume its simple interest.

Formula for simple interest is I = PTR/100 where P is principal amount ($300 in this case) T = Time in years (4 yrs) , R is rate of interest.[/quote]

A basic savings account pays interest once per year on December 31. If Alan deposits $300 into the account on January 1, 2004, and does not deposit or withdraw any money in the meantime, then to the nearest cent, how much was in the account when he withdrew the money on January 1, 2009?

(1) The savings account interest rate is 2% per year (2) If Alan had left the money in the account for 2 more years, he would have had, to the nearest cent, $13.12 more.

The answer is D. For statement (2), the book explains the equation as $300(1+i)6 - $300(1+i)4= 13.12. But, I think n should be 7 and 5 and be squared, not multiplied: $300(1+i)^7 - $300(1+i)^5= 13.12 Can anyone answer this??

by the way, do you guys see many errors in the Princeton Review?? Because I have found many....;;

The second statement must give the same interest of 2% as given in the first statement. Taking this into account the book also means compound interest because only from 300(1+x)^6 - 300(1+x)^4= 13.12 you get x=0.02. But I agree it should be 7 and 5, not 6 and 4. Overall not a good question.
_________________

Its been long time coming. I have always been passionate about poetry. It’s my way of expressing my feelings and emotions. And i feel a person can convey...

Written by Scottish historian Niall Ferguson , the book is subtitled “A Financial History of the World”. There is also a long documentary of the same name that the...

Post-MBA I became very intrigued by how senior leaders navigated their career progression. It was also at this time that I realized I learned nothing about this during my...